US Federal IT spending

An independent study Modernization of the U.S. Federal Government IT, Market Scenario 2018-2021 conducted by Market Research Media finds that radical modernization of US Federal IT systems could save about $20 Billion annually. Increasingly unmanageable and obsolete US Federal IT systems bleed taxpayers’ money on a scale comparable with GDP of a small country. Hard earned taxpayers dollars are inefficiently spent on endless patching of badly broken legacy systems hold captive by traditional IT vendors with their complex service agreements and prohibitively expensive pricing models.

The report depicts a market scenario of radical overhaul of Federal IT by shifting funding from operations and maintenance to modernization. Referring to private sector case studies and patterns, analysts conclude that technologically and organizationally-wise cutting federal IT spending by 20% is feasible within a few years of deep transformation. However, the question whether the current White House administration has political leverage, will and competency to do overhaul, remains beyond the report’s scope.

The same could be said to some degree about enterprise IT market but change is already there, unlike federal IT. Big Three of the Cloud (Amazon, Google and Microsoft) as well as smaller technology vendors of cloud generation are disrupting traditional IT market, the best evidence of disruption is fall of IBM revenues for 5 consecutive years. Now disruption is coming to the federal IT organization.

The report names Function as a Service model, also known as a serverless model, an icebreaker technology, for cracking monolith IT systems into smaller manageable pieces with lesser legacy foothold. The report also stresses importance of human factor – the federal IT workforce is ageing and not on par with private sector.